Resource Plays

Birchcliff is focused on its established Montney/Doig Resource Play in the Peace River Arch area of Alberta. Birchcliff characterizes its resource play as a play that has regionally pervasive, continuous, low permeability hydrocarbon accumulations or systems that usually require intensive stimulation to produce. The production characteristics of this play includes steep initial declines that rapidly trend to much lower decline rates, yielding long life production and reserves over time. Resource plays exhibit a statistical distribution of estimated ultimate recoveries and therefore provide a repeatable distribution of drilling opportunities. As more wells are drilled into a resource play, there is a substantial decrease in both the geological and technical risks. The Montney/Doig Resource Play is ideally suited for the application of horizontal drilling and multi-stage fracture stimulation technology.

MONTNEY/DOIG RESOURCE PLAY

Birchcliff’s Montney/Doig Resource Play is centred approximately 95 kilometres northwest of Grande Prairie and, in the opinion of management, is one of the most sought after resource plays in North America. Birchcliff’s Montney/Doig Resource Play contains three primary producing regions: Pouce Coupe, Gordondale and Elmworth.

The Montney/Doig Resource Play in Birchcliff’s core areas of operations is approximately 300 m (1,000 feet) thick. The play has a large areal extent covering in excess of 50,000 square miles. Another very important attribute is the mineralogy of the reservoir. The Montney/Doig is composed of a high percentage of hard minerals and a very low percentage of soft minerals including clays resulting in exceptional “fracability”. This, combined with the current stress regime, results in the rock shattering more like glass in a complex fracture style versus a simple bi-wing style. The rock parameters also yield exceptional fracture stability; the fractures stay open due to low proppant embedment. This is a key contributing factor to the very low terminal declines and large estimated ultimate recoveries of the play. Unlike most shale gas plays that are predominantly shale, the Montney/Doig is classified by Birchcliff as a hybrid resource play because it is comprised of gas saturated rock with both tight silt and sand reservoir rock interlayered with shale gas source rock. This results in relatively high permeability and productivity rates.

Hydrodynamics is another important attribute for resource plays. A large portion of the Montney/Doig Resource Play is over-pressured which reduces the potential for significant water production. The Pouce Coupe and Gordondale areas are predominantly over-pressured which also results in higher gas in-place.

These rock properties result in high recovery factors.

The Montney and a majority of the Doig were deposited in a lower to middle shore face environment that is regionally extensive and results in a widespread style deposit that provides for more repeatable results.